Senator Says Second Stimulus Could Benefit Hospitality Workers

Political pundits have been sharing their thoughts about the possibility of a second round of stimulus payments for months. Speaking in Kentucky yesterday, Senator Mitch McConnell signaled strongly that Americans will receive a second stimulus payment.

Some Americans, anyway.

The first stimulus payment, part of the $2T CARES Act, was limited by an adjusted gross income (AGI) cap. Individuals with an AGI up to $75,000, married couples with an AGI up to $150,000, and heads of households with an AGI up to $112,500 were eligible to receive the full stimulus payment of $1,200.

Individuals, married couples and heads of households with AGIs above the caps were placed into a phase out category: For every $100 over the limit, $5 were “phased out” of their stimulus payment. If an individual made $99,000, for example, they received no payment at all.

Which brings us to Sen. McConnell’s statement yesterday. While he shared none of the details in a bill that’s said to be in the drafting stage, Sen. McConnell mentioned what could be interpreted as an income cap for a second round of stimulus payments—one much lower than that which accompanied the first payment.

“I think the people who have been hit the hardest are people who make about $40,000 a year or less,” he said.

Again, Sen. McConnell didn’t say definitively that a second stimulus payment was on the horizon, nor did he say explicitly that it would come with a $40,000 AGI cap. However, the Senate majority leader has previously signaled his preference for more targeted stimulus payments, and the statement he made yesterday strongly suggests another round of payments is receiving Senate and GOP support.

During his statement, Sen. McConnell acknowledged the hospitality industry specifically.

“Many of them work in the hospitality industry. The hospitality industry, as you know, just got rim-racked—hotels, restaurants—and so [more stimulus payments] could well be part of it. The country needs one last boost,” said Sen. McConnell.

Whether his invocation of the hospitality industry is a hint that RESTAURANTS Act details could be part of a new bill is anyone’s guess. If his mention of $40,000 is a nod to a stimulus payment cap, the inclusion of the hospitality industry in his statement could be a positive indicator that relief for the industry will be included in the bill being drafted.

A safe bet about what’s definitely not going to be included in the bill has to do with unemployment insurance. Sen. McConnell called the extra benefit of $600—which runs out at the end of this month—a mistake, saying it was “a bonus not to go back to work.”

Some operators have expressed frustration with the extra benefit, noting that it has made their employees unwilling to return to work, hindering reopening efforts. Others have stood in solidarity with their workers, saying they understand their perspective.

Reopening efforts have been hindered by more than the unwillingness of some employees to return to their jobs. In several states, the worst-case scenario of “close-reopen-close” has materialized. Spikes in COVID-19 infections, state leaders saying they reopened too soon, and Dr. Anthony Fauci stating that we’re “knee-deep” in the coronavirus’ first wave are impacting the hospitality industry. Some states are taking steps backward in their phased reopening plans, imposing new restrictions and ordering dining rooms, bars, nightclubs, entertainment venues and other businesses to close their doors.

To be fair, Sen. McConnell didn’t say he was opposed to unemployment insurance in general, telling reporters, “To have the basic protections of unemployment insurance is extremely important and should be continued.”

However, another round of stimulus payments is unlikely to keep the millions of unemployed hospitality workers afloat for long if they can’t return to work safely. Additionally, restaurant, bar and hotel traffic would need to return to levels that can generate sufficient, reliable income at the least.

Restaurant Business reported last week that the industry added roughly 1.5 million jobs in June. That means that about 9.2 million Americans are employed by restaurants. However, that’s more than three million less than pre-pandemic levels. The publication also noted that almost one-third of people who got jobs in June found work in restaurants, adding that over the past two months it has been restaurants that are supporting the overall economy. That makes relief for restaurants and the hospitality industry as a whole even more important for the economic recovery of America.

The moratorium on evictions is coming to an end and millions of people—not just those in the hospitality industry—are at risk of losing their homes. A stimulus check, while helpful, likely won’t buy the majority of unemployed people much of a reprieve. One thing is clear: the next economic aid bill must support the hospitality industry and its workforce.

Image by Francine Sreca from Pixabay